Whichever party wins the general election on 4 July 2024 to form the next government, they will have to build a robust, sustainable plan that ensures it meets its fiscal targets. It can only do so by cutting spending and/or raising taxes.
This summary covers the main proposals on personal tax, business tax and related matters of the three traditional main national parties. However, given that the total page count of the three manifestos was 333 pages, it does not claim to be exhaustive – there are some smaller, detailed plans which could not be included in a summary. As ever, what is not mentioned in a manifesto can be as important as the manifesto’s content.
The rising cost of retirement, an ageing population plus voting patterns of pensioners, put pensions in the spotlight.
| Labour | Conservative | Liberal Democrat |
| Pensions | ||
| Reforms to workplace pensions.
No comment on lifetime allowance.
|
New ‘Pensions Tax Guarantee’ promising:
Retain current reliefs. |
Review rules concerning pensions for gig economy workers.
|
| Labour |
| Reforms to workplace pensions.
No comment on lifetime allowance. |
| Conservative |
New ‘Pensions Tax Guarantee’ promising:
Retain current reliefs. |
| Liberal Democrat |
| Review rules concerning pensions for gig economy workers. |
The focus for most voters and much of the debate so far, the tax burden on families and individuals is a key battleground.
| Labour | Conservative | Liberal Democrat |
| Will not increase the basic, higher, or additional rates of income tax.
Freeze of income tax allowances and bands remains.
|
No increase in income tax.
“Triple Lock Plus” for the personal allowance of taxpayers aged 66 and above. Allowance rises in line with state pension rate of increase. Otherwise, freeze of income tax allowances and bands remain. The High-Income Child Benefit Charge will be switched from an individual to a household income basis with taper occurring between £120,000 and £160,000. |
Raise the personal allowance “when the public finances allow”.
|
| Labour |
| Will not increase the basic, higher, or additional rates of income tax.
Freeze of income tax allowances and bands remains. |
| Conservative |
| No increase in income tax.
“Triple Lock Plus” for the personal allowance of taxpayers aged 66 and above. Allowance rises in line with state pension rate of increase. Otherwise, freeze of income tax allowances and bands remain. The High-Income Child Benefit Charge will be switched from an individual to a household income basis with taper occurring between £120,000 and £160,000. |
| Liberal Democrat |
| Raise the personal allowance “when the public finances allow”. |
| Labour | Conservative | Liberal Democrat |
| No increase to NICs.
For employees, employers and self-employed, existing threshold freezes continue.
|
One percentage point reduction to main employee NICs rate for 2025/26 and for 2027/28, leaving rate at 6%. 2% rate above Upper Earnings Limit unchanged.
Cut the main rate for the self-employed by one percentage point each year from 2025/26 to 2% in 2028/29. Abolish in 2029/30. 2% rate above Upper Profits Limit unchanged. For employees, employers and self-employed, existing threshold freezes continue. |
Review “the tax and national insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.”
|
| Labour |
| No increase to NICs.
For employees, employers and self-employed, existing threshold freezes continue. |
| Conservative |
| One percentage point reduction to main employee NICs rate for 2025/26 and for 2027/28, leaving rate at 6%. 2% rate above Upper Earnings Limit unchanged.
Cut the main rate for the self-employed by one percentage point each year from 2025/26 to 2% in 2028/29. Abolish in 2029/30. 2% rate above Upper Profits Limit unchanged. For employees, employers and self-employed, existing threshold freezes continue. |
| Liberal Democrat |
| Review “the tax and national insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.” |
| Labour | Conservative | Liberal Democrat |
| Capital Gains Tax (CGT) | ||
| Carried interest will be treated as income, not capital gain. | No increase to CGT.
Business Asset Disposal Relief continued. |
Raise annual exemption to £5,000, with tax to be based solely on gain:
· 45% of gains exceeding £100,000, · 40% between £50,000-£100,000; and · 20% on other gains. Introduce a new small business relief. |
| Inheritance Tax (IHT) | ||
| No comment. | Keep business relief and agricultural relief. | No comment. |
| Stamp Duty Land Tax (SDLT) | ||
| Raise the residential SDLT surcharge paid by non-UK residents by one percentage point. | No increases.
£425,000 SDLT 0% threshold for first-time buyers to be made permanent. |
Surcharge on purchase of second homes by overseas residents. |
| Capital Gains Tax (CGT) |
| Labour |
| Carried interest will be treated as income, not capital gain. |
| Conservative |
| No increase to CGT.
Business Asset Disposal Relief continued. |
| Liberal Democrat |
| Raise annual exemption to £5,000, with tax to be based tax solely on gain:
· 45% or gains exceeding £100,000, · 40% between £50,000-£100,000; and · 20% on other gains. Introduce a new small business relief. |
| Inheritance Tax (IHT) |
| Labour |
| No comment. |
| Conservative |
| Keep business relief and agricultural relief. |
| Liberal Democrat |
| No comment. |
| Stamp Duty Land Tax (SDLT) |
| Labour |
| Raise the residential SDLT surcharge paid by non-UK residents by one percentage point. |
| Conservative |
| No increases.
£425,000 SDLT 0% threshold for first-time buyers to be made permanent. |
| Liberal Democrat |
| Surcharge on purchase of second homes by overseas residents. |
| Labour | Conservative | Liberal Democrat |
| Non-doms | ||
| Abolish non-dom tax status, replace it with a shorter-term scheme for people staying in the country and remove the “loopholes” left in the Conservative proposal. | Already set out their changes to the non-dom regime and so expected to follow through with that if elected.
For a summary of the Conservative plans to the change the non-domicile regime in April 2025, see our blog here. |
No comment. |
| Labour |
| Abolish non-dom tax status, replace it with a shorter-term scheme for people staying in the country and remove the “loopholes” left in the Conservative proposal. |
| Conservative |
| Already set out their changes to the non-dom regime and so expected to follow through with that if elected.
For a summary of the Conservative plans to the change the non-domicile regime in April 2025, see our blog here. |
| Liberal Democrat |
| No comment. |
The ‘third rail’ of politics, funding for social care is a contentious area, as demonstrated by previous governments.
| Labour | Conservative | Liberal Democrat |
| State pensions | ||
| Keep Triple Lock.
|
Keep Triple Lock.
Maintain all existing pensioner benefits. Consider the Ombudsman WASPI women report and provide ‘an appropriate and swift response’. |
Keep Triple Lock.
Make sure that WASPI women are “finally treated fairly and properly compensated”. |
| Universal credit | ||
| Review Universal Credit.
|
Accelerate the roll-out, moving all legacy benefit claimants onto Universal Credit.
|
Cut waiting period for the first payment to five days.
Abolish the bedroom tax. Replace sanctions regime with an incentive-based scheme. Abolish young parent rates. Set up an independent commission to recommend further annual increases in Universal Credit. |
| Social care in England | ||
| Establish a ‘Fair Pay Agreement’ in adult social care.’
Build a consensus for the longer-term reform required for a sustainable National Care Service. |
Cap social care costs from October 2025 based on Care Act 2014. | Introduce free personal care based on the Scottish model.
Launch a social care workforce plan, establish a Royal College of Care Workers to improve recognition and career progression, and introduce a higher Carer’s Minimum Wage, initially £2 an hour above minimum wage. Set up a cross-party commission to design a long-term sustainable funding for social care. Increase Carer’s Allowance and expand eligibility for it. |
| State pensions |
| Labour |
| Keep Triple Lock. |
| Conservative |
| Keep Triple Lock.
Maintain all existing pensioner benefits. Consider the Ombudsman WASPI women report and provide ‘an appropriate and swift response’. |
| Liberal Democrat |
| Keep Triple Lock.
Make sure that WASPI women are “finally treated fairly and properly compensated”. |
| Universal credit |
| Labour |
| Review Universal Credit. |
| Conservative |
| Accelerate the roll-out, moving all legacy benefit claimants onto Universal Credit. |
| Liberal Democrat |
| Cut waiting period for the first payment to five days.
Abolish the bedroom tax. Replace sanctions regime with an incentive-based scheme. Abolish young parent rates. Set up an independent commission to recommend further annual increases in Universal Credit. |
| Social care in England |
| Labour |
| Establish a ‘Fair Pay Agreement’ in adult social care.’
Build a consensus for the longer-term reform required for a sustainable National Care Service. |
| Conservative |
| Cap social care costs from October 2025 based on Care Act 2014. |
| Liberal Democrat |
| Introduce free personal care based on the Scottish model.
Launch a social care workforce plan, establish a Royal College of Care Workers to improve recognition and career progression, and introduce a higher Carer’s Minimum Wage, initially £2 an hour above minimum wage. Set up a cross-party commission to design a long-term sustainable funding for social care. Increase Carer’s Allowance and expand eligibility for it. |
With economic growth at the centre of much of the election messaging so far, the future of business taxes will play a key role.
| Labour | Conservative | Liberal Democrat |
| Corporation tax | ||
| Maintain corporation tax at 25%.
Publish a roadmap for business taxation for the next parliament. Keep full expensing system for capital investment and the annual investment allowance for small business. Give businesses more clarity on what qualifies for allowances. |
No increase in corporation tax.
Maintain R&D reliefs.
|
Make the case for increasing the global minimum rate of corporation tax to 21%.
Restore the Bank Surcharge and Bank Levy revenues to 2016 levels in real terms. Increase the Digital Services Tax on social media firms and other tech giants from 2% to 6%. Introduce a 4% tax on the share buyback schemes of FTSE-100 listed companies. |
| VAT | ||
| No increase in VAT.
Levy VAT on private schools.
|
No increase in VAT.
Keep the threshold under review and explore options to smooth the cliff edge at registration level. |
Remove the VAT exemptions for private, first-class and business-class flights. |
| Business rates | ||
| Scrap the existing business rates system and establish “a fairer way” to raise the same revenue.
Remove exemption for private schools. |
Ease rates for high street, leisure and hospitality businesses by raising the multiplier on distribution warehouses. | Abolish business rates and replace with a Commercial Landowner Levy. |
| Corporation tax |
| Labour |
| Maintain corporation tax at 25%
Publish a roadmap for business taxation for the next parliament. Keep full expensing system for capital investment and the annual investment allowance for small business. Give businesses more clarity on what qualifies for allowances. |
| Conservative |
| No increase in corporation tax.
Maintain R&D reliefs. |
| Liberal Democrat |
| Make the case for increasing the global minimum rate of corporation tax to 21%.
Restore the Bank Surcharge and Bank Levy revenues to 2016 levels in real terms. Increase the Digital Services Tax on social media firms and other tech giants from 2% to 6%. Introduce a 4% tax on the share buyback schemes of FTSE-100 listed companies. |
| VAT |
| Labour |
| No increase in VAT.
Levy VAT on private schools. |
| Conservative |
| No increase in VAT.
Keep the threshold under review and explore options to smooth the cliff edge at registration level. |
| Liberal Democrat |
| Remove the VAT exemptions for private, first-class and business-class flights. |
| Business rates |
| Labour |
| Scrap the existing business rates system and establish “a fairer way” to raise the same revenue.
Remove exemption for private schools. |
| Conservative |
| Ease rates for high street, leisure and hospitality businesses by raising the multiplier on distribution warehouses. |
| Liberal Democrat |
| Abolish business rates and replace with a Commercial Landowner Levy. |
The financial framework for achieving any of the policies outlined is itself an issue in the election, although in this area there is both surprising consistency and, in the view of the Institute for Fiscal Studies, a conspiracy of silence.
| Labour | Conservative | Liberal Democrat |
| Current budget (day-to-day spending) must move into balance by the fifth year of the fiscal forecast.
Debt must be falling as a share of the economy by the fifth year of the forecast. |
Public sector net debt to be falling in the fifth year of the fiscal forecast.
Public sector net borrowing is below 3% of GDP in the fifth year of the fiscal forecast. |
Ensure that day-to-day spending does not exceed the amount raised in taxes.
Get the national debt falling as a share of the economy.
|
| Labour |
| Current budget (day-to-day spending) must move into balance by the fifth year of the fiscal forecast.
Debt must be falling as a share of the economy by the fifth year of the forecast. |
| Conservative |
| Public sector net debt to be falling in the fifth year of the fiscal forecast.
Public sector net borrowing is below 3% of GDP in the fifth year of the fiscal forecast. |
| Liberal Democrat |
| Ensure that day-to-day spending does not exceed the amount raised in taxes.
Get the national debt falling as a share of the economy. |
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